How Global Corporate Giants are Shaping the Future of Digital Currencies
Ever since global giants, Amazon and Starbucks, declared their interest in integrating blockchain in their finance models, rumors have been circulating as to just how they would make that happen.
Amazon already hopped onto the crypto bandwagon when it signed a deal with R3 in December 2017 allowing it access to Corda platform. While there are no confirmations on which digital currency would be used, there are expectations that the company will create an ‘Amazon coin’ or use an already established currency.
At the same time, Starbucks, a tech savvy retailer, has hinted at the possibility of utilizing cryptocurrencies on its payment platform. This is not surprising because Starbucks pioneered mobile payments on its application system. Should either of these companies move past theory to institute these additions, the cryptocurrency market might burst into an animated frenzy.
Cryptocurrency players believe that if the companies decide to create their own currencies, they will be able to apply them across their networks.
Steven Dryall, founding director of NikoCoin, says, “If Starbucks created their own cryptocurrency, and deployed its use across their operation from top to bottom, that would be very interesting, exceptionally viable and quite fun. If Amazon created their own cryptocurrency, they could easily deploy it across their entire network of offerings. The Three Pillars of an Amazon coin could potentially propel it to become a top three coin, if not number one overall. This would potentially be the catalyst that propels a global economic restructuring that has never been witnessed in the history of humanity.”
However, a currency dedicated solely to Amazon would not be ideal because it would be limited to Amazon’s products, unless the company decides to trade it on an open exchange.
Even so, speculations are rife that though Bitcoin remains the most popular virtual currency, it may not be the currency of choice for either Amazon or Starbucks. This is due to its extremely high volatility and risk. For the two global giants, Litecoin might present a better solution, but this remains to be seen.
If Amazon and Starbucks opt to use Litecoin, it would not come as a surprise because it is a more stable, less volatile virtual currency. Unlike ‘Amazon coin’, Litecoin can be converted into fiat currency with ease. In terms of transaction costs that have deterred major corporations from adopting cryptocurrencies this far, it would be free.
Impact on the Market
The market is already skeptical of wide scale application of cryptocurrencies, particularly due to their innate features of anonymity and non-transparency.
Howard Schultz, CEO of Starbucks, believes that cryptocurrencies can only be legitimized “by a brand in a brick and mortar environment” where consumers already have established confidence and trust in the company.
Jeffrey Lin, CEO of GCOX, says, “Through big players like Amazon and Starbucks, with their huge customer base and existing ecosystems, we believe that this will create an avenue for non-crypto players to better understand the technology, its user-ability and utility to allow greater scalability of crypto currencies in the future, which is similar to what we do at GCOX. We are confident that with their involvement as well as other organizations and major players in various industries will begin to adopt blockchain technology into their businesses.”
The market seems to be waiting for a catalyst to move things along. Amazon and Starbucks have some of the highest transaction volumes globally, an aspect that makes their decision to integrate blockchain and cryptocurrencies in their models significant. If their vision materializes, the market is likely to respond in a very positive way.
Joshua Mezher, founder of RoyaltyRewards, says, “In some ways corporate adoption marks a shift away from the initial, speculative technology into a more well-defined, value-added model. Whatever price tag Amazon or Starbucks puts on the blockchain will be reflected in the cryptocurrency market.”
Nothing is concrete as of yet, but all indications point to a positive shift in the market where consumers view cryptocurrencies differently in future.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.